FOSTER CITY, Calif. (AP) — Never lacking daring ideas, billionaire entrepreneur Elon Musk is determined to jolt the electricity market.
The CEO of electric car maker Tesla Motors hopes to park hundreds of millions of large, solar panel-connected batteries in homes and businesses so the world can disconnect from power plants — and he can profit. On Thursday night, before an adoring crowd and a party-like atmosphere, Musk unveiled how he intends to do it.
Musk took the stage at Tesla’s design studio near Los Angeles International Airport, an audience of drink-toting enthusiasts cheering him on, in a scene fitting for an audacious dreamer renowned for pursuing far-out projects. Colonizing Mars is one of Musk’s goals at Space X, a rocket maker that he also runs.
Now, he is setting out on another ambitious mission. “Our goal here is to fundamentally change the way the world uses energy,” Musk told reporters gathered in Hawthorne, California.
Although Tesla will make the battery called “Powerwall,” it will be sold by a variety of other companies. The list of partners includes SolarCity, a solar installer founded by Musk’s cousins, Lyndon and Peter Rive. Musk is SolarCity’s chairman and largest shareholder.
As with Tesla’s electric cars, which start around $70,000, the battery might be too expensive for most consumers. The system will carry a suggested price of $3,000 to $3,500, depending on the desired capacity. Installation will be extra. That could discourage widespread adoption, especially for a product that may only have limited use.
“I don’t believe this product in its first incarnation will be interesting to the average person,” conceded Peter Rive, SolarCity’s chief technology officer. Rive, though, still expects there to be enough demand to substantially increase the number of batteries in homes.
Musk is so encouraged by the initial demand that he believes Tesla and other future entrants in the market will be able to sell 2 billion battery packs around the world — roughly the same number of vehicles already on roads. Although that may sound like a “super crazy” goal, Musk insisted it “is within the power of humanity to do.”
It will take a long time to get there. Tesla hopes to begin shipping a limited number of Powerwall batteries this summer in the U.S. before expanding internationally next year.
The long-term goal is to reduce the world’s reliance on energy generated from fossil fuels while creating regional networks of home batteries that could be controlled as if they were a power plant. That would give utilities another way to ensure that they can provide power at times of peak demand.
For now, the battery primarily serves as an expensive backup system during blackouts for customers like David Cunningham, an aerospace engineer from Foster City, California. He installed a Tesla battery late last year to pair with his solar panels as part of a pilot program run by the California Public Utilities Commission to test home battery performance.
Although Cunningham’s home has not endured a blackout in the six months that he has had the battery, it’s capable of running critical home appliances like lights and refrigeration and can be recharged by solar panels during the day.
“As long as a person has solar panels, it’s just a natural fit for the two to go together,” Cunningham, 77, said. “I consider it to be a whole power system right here in my home.”
Cunningham took advantage of state incentives that sharply reduced the battery’s $18,300 sticker price under the pilot program. He still paid $7,500.
“The value proposition now is around reliability and backup power more than it is around savings, but over time that may change,” said Shayle Kann, an analyst at GTM Research.
The batteries are likely to become more useful if, as expected, more utilities and regulators allow power prices to change throughout the day based on market conditions. That way, the software that controls the solar and battery system will allow customers to use their home-generated power — and not expensive grid power — when grid prices spike.
Many commercial customers already buy power this way, and Tesla also announced battery systems designed for them, along with bigger battery packs that utilities can use to manage their grids. Analysts say these utility and commercial markets will probably be more promising for Tesla during the next few years than residential customers.
Several businesses, including Amazon.com and Target, plan to use Tesla’s battery storage system on a limited basis. Southern California Edison is already using Tesla batteries to store energy.
Tesla is building a giant factory in Nevada that will begin churning out batteries in 2017, so Musk needs to begin drumming up customers now. The spotlight may help Musk push policy makers and utilities to consider reshaping regulations so solar and battery storage could be more easily incorporated into the larger electric system, Kann said.
Tesla’s ambitions already have intrigued homeowners like Mike Thielen, who installed one of the prototype batteries with SolarCity panels on his Redondo Beach, California, home last year. Although he hasn’t needed the backup power yet, he has embraced the concept.
“I think it’s brilliant,” he said. “I would consider upgrading to a more powerful home battery if they could figure out a way to get me totally off the grid.”
Investors seemed unmoved by Musk’s latest vision. Tesla’s stock dipped 2 cents Friday to close at $226.03.
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Fahey reported from New York and Houston. AP Writer Justin Pritchard contributed to this story from Hawthorne, California.
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Liedtke can be reached at http://twitter.com/liedtkesfc . Fahey can be reached at http://twitter.com/JonathanFahey .
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Energy storage seems to be a limiting factor for solar and other renewables, and advanced battery technology could overcome that bottleneck.
A few days ago, another site reporting on this development noted that some other promising technologies, such as titanium-air and solid-state electrolytes, are also on the horizon.
A few years ago, someone told me he developed a prototype for a battery system for home solar use that utilized existing technology. However, it needed about a hundred car batteries to provide storage and required installation in a basement or outdoor shed – picture a cube about three foot a side - and so increased density of stored energy seems promising.
Yes, storage is an issue for my off grid system. I placed 10 deep discharge batteries in the carport on a special wall created to shelf, connect and protect the batteries. Would be nice to have same with a couple of these wall mounted units, however, the cost for just one far outstrips the total cost for the batteries, cabling, etc, etc. I’ll wait and see what the prices are when the Giga Factory comes on line and priced drop. Then again my batteries each have a 5-7 year life expectancy. Cost is from $150-500 per battery, so using $250 per my 10 batteries cost $2500 and provide the backup power for a standalone refrig, standalone freezer, TV, computer, washer/dryer, backup hot water, backup heat, etc, etc…
I’m a dilettante in this, as in most things, but I’ve been poking around for years because it’s clear to me that the real problem in kicking the carbon addiction has always been storage, not generation. Hydrocarbon liquids rule transportation because there just isn’t any other way to store that much energy cheaply and easily and carry it around with us, nor is there any other way to load that much energy into a transport mode so quickly and, relatively safely (you know, for stuff that’s somewhere between dynamite and C4 for dangerousness).
And, discouragingly, the big constraint seems to be one of physics, not one one of technology. It looks like if we finally managed to make the best battery physics allows cheaply, it still wouldn’t be good enough. It would still be too big, have too small a mass to power storage ratio and take too long to charge to compete with a tank of gasoline/kerosene/diesel. Room temperature superconducting capacitor rings would come closer, but so far, it’s looking like those are always going to require some level of cryonic cooling. And there’s still a limit on how fast capacitors can be charged, and a greater risk they’ll catastrophically release that energy all at once than with a tank of gas. Certainly, it will always be safer to pump a tank of gas than to move an equivalent amount of electricity in the same timeframe.
There are other properties of matter besides chemical bonds and electron shells that store energy, but so far we haven’t found a way to mess with those that isn’t far more dangerous than a high tension line or a dewar of liquid nitrogen or a tank of gas. As I said, it’s all a bit discouraging. No phaser power packs or shipstones in the foreseeable future.
Interesting, and I look forward to seeing what further technological advances and increased demand – both from consumer end users and utility-scale industry – bring about.